London/Madrid - Profit at International Airlines Group more than doubled in the third quarter as Spanish carrier Iberia began to recover, adding to another strong performance from British Airways and boosting its shares.

Europe's third-biggest airline group by market value said on Friday restructuring at Iberia, which has suffered from labour disputes and the loss of once-loyal Spanish consumers to budget rivals during an economic slump, was starting to bear fruit.

IAG, the parent of BA and Spanish carriers Iberia and Vueling, posted an operating profit of 690 million euros ($923 million) for the three months to end-Sept, compared with a profit of 270 million in the same period a year ago.

IAG was expected to report a third-quarter operating profit, before exceptional items, of 600 million euros, according to a company-supplied consensus forecast.

Shares in IAG, which have already doubled over the past year, jumped 3.1 percent to 359.8 pounds, outperforming rivals Lufthansa and Air France.

“The airlines within the group are performing well, underlying market conditions remain unchanged, and the profit target for the year indicates that we expect to be profitable,” IAG boss Willie Walsh told reporters.

IAG is targeting 2013 operating profit of around 740 million euros, a figure BPI analysts said was above their forecasts.

Walsh declined to update longer-term targets which he said would be provided at an investor day next week.

Other legacy European airlines such as Lufthansa and Air France-KLM are slashing jobs and revising growth plans as they grapple with soaring jet fuel prices and a weak economy, leaving gaps that budget carriers have been quick to exploit.

The appearance of low-cost airlines and high-speed trains in Spain have been particularly harsh on Iberia's business during five years of economic recession or stagnation that just ended in the third quarter.

Profit at Iberia rose to 74 million euros in the third quarter from 1 million in the same period a year ago, while BA made a quarterly operating profit of 477 million euros, up from 268 million a year ago.

Group revenues rose by an annual 6.9 percent to 5.4 billion euros in the quarter. - Reuters